We're sorry and we're changing: NAB

We're sorry and we're changing: NAB

NAB’s chief executive has apologised for the way the bank treated some customers, while also highlighting measures the bank has taken to improve its culture.

“The Royal Commission has exposed issues in our bank, and our industry, that have been confronting and upsetting,” Andrew Thorburn said in a statement to the House of Representatives Standing Committee on Economics.

“In so many cases we have not had the care and respect for our customers that we should have, and for that I am sorry.

“The commissioner’s interim report outlined this in a fair and balanced way, and we will respond thoughtfully.”

Mr Thorburn said there had been at least four big shifts that had occurred inside banks over the past 30 years that had led to a significant change in culture:

  1. The primary focus has shifted away from customers
  2. Long-term thinking has given way to short-term thinking
  3. There has been a greater focus on incentive compensation – but the wrong behaviours (sales and short-term growth) have been incentivised
  4. Banks have become bound by internal rules, policies, regulation and legacy systems

We’re getting better, says NAB

NAB is working to become a better bank and earn the trust of customers, according to Mr Thorburn. Measures include:

  • Aiming to deliver exceptional customer service
  • Holding the bank’s 3,000 leaders to account through leadership standards that include a focus on empathy
  • Implementing incentives that focus on customers and the longer term
  • Investing in more reliable technology
  • Reducing the number of products, fees and forms required
  • Removing layers of management so decisions are made and acted on faster

Mr Thorburn also highlighted several positive actions NAB had taken over the past few months:

  • Declining to follow ANZ, Commonwealth Bank and Westpac in raising standard variable home loan interest rates
  • Allowing farming customers to offset their farm management deposits against their lending
  • Ending the use of higher default interest rates for farmers in drought-declared areas
  • Reversing the decision to close the Narooma and Dungog branches in regional NSW
  • Placing a moratorium on branch closures in drought-declared areas

“We have a long way to go to once more be the bank we want to be for our customers,” he said.

“We are more aware, more committed and more progressed on this journey than ever before. We will continue until it is achieved.”

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What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.

Monthly Repayment

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What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

How long does NAB home loan approval take?

The time required to get your home loan from NAB approved can vary based on a number of factors involved in the application process. 

Once you have applied for a home loan, a NAB specialist will contact you within 24 hours over the phone to take down relevant information, including your total income, debts (existing loans, credit cards, etc.), assets (car, shares, etc.), and your monthly expenses (food, utility bills, etc.). Your lender might also ask for information related to the property you want to purchase, including the type of dwelling and preferred postcode.

NAB will then verify all your information and check your credit score, and if the details stack up, you should be given a conditional approval certificate. This certificate stipulates how much money NAB is willing to lend you and is typically valid for 90 days. 

Once you have your conditional approval, you can start browsing for properties that you like and that fit within the budget that NAB has provided. After you find a suitable property, you’ll need to give a copy of the signed deed to NAB, following which you should get full approval and access to the funds. This process can take up to 4-6 weeks. 

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Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

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What is a valuation and valuation fee?

A valuation is an assessment of what your home is worth, calculated by a professional valuer. A valuation report is typically required whenever a property is bought, sold or refinanced. The valuation fee is paid to cover the cost of preparing a valuation report.

What is a construction loan?

A construction loan is loan taken out for the purpose of building or substantially renovating a residential property. Under this type of loan, the funds are released in stages when certain milestones in the construction process are reached. Once the building is complete, the loan will revert to a standard principal and interest mortgage.

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